Register a company to work with cryptocurrencies

In the preceding years, legal frameworks have been introduced to regulate cryptocurrencies in various jurisdictions. While some countries have attempted to ban the use of cryptocurrencies and take measures against cryptocurrency mining, others have seen numerous opportunities in crypto projects. This material focuses on the most crypto-friendly jurisdictions, with a particular emphasis on the ease of starting a cryptocurrency business, the clarity of the regulatory framework for regulating crypto companies in different areas, tax considerations, and access to banking services for crypto projects.

Types of cryptocurrency business

If you intend to initiate a cryptocurrency business in Europe, Asia, or the United States, it is suggested to initially identify the type of activity that aligns with your preferences, considering the multitude of options available. Some of the most prosperous ventures include:

• Cryptocurrency mining
• Cryptocurrency exchange
• Initial Coin Offerings (ICO)

Each of these activities has its own set of considerations and regulatory aspects, so understanding the nature of your business is crucial before proceeding.

Opening a crypto company in different locations: key stages

The choice of jurisdiction for establishing a cryptocurrency company should be based on identifying future opportunities for the development of your business. The most crypto-friendly countries for registering an ICO company on each continent are discussed below.

The stage of establishing a cryptocurrency company involves formulating a business model. The primary concept revolves around crafting and evolving your unique digital currency, as this approach has proven successful for the majority of startups.

The next step is to register the company for cryptocurrency activities. Before you can start the business, you will need to register to pay various state taxes.

Next, you must proceed to establish a bank account for the crypto company which is crucial for protecting personal assets.

The best countries to launch a crypto startup in Europe

For an investor or cryptocurrency holder, a good choice for registering a company engaged in digital currency operations in EU is a country whose government and financial system are well-informed about cryptocurrencies and have favorable tax and banking policies. Furthermore, a unique confirmation of the authorities' commitment to the development of the crypto industry is the presence of other investors and crypto firms. Here are the countries that are among the top European jurisdictions for establishing a crypto firm:

Estonia

This place is considered to become pioneer in introducing the legalization of token-based and cryptocurrency enterprises. Additionally, it is one of the first states to offer remote registration with electronic residency. There is a very high likelihood of successfully obtaining a license for a cryptocurrency exchange in Estonia and registering an Estonian company for an ICO.

To start a cryptocurrency exchange business in Estonia, the exchange must be registered or have a registered branch in Estonia, comply with KYC procedures, and so on. Additionally, the exchange must obtain an Estonian license for cryptocurrency activities in accordance with the MLTFPA (Money Laundering and Terrorist Financing Prevention Act). It is important to note that opening an account for a crypto company in Estonia is limited to local business entities.

Georgia

This Eastern European country is betwixt the leading cryptocurrency nations globally. According to a global comparative cryptocurrency study, Georgia ranks 2nd in the world in Bitcoin mining. It has no legislative restrictions on cryptocurrency exchange and does not require a license for such activities. Additionally, the state ensures a top-notch level of tax certainty when registering businesses involved in cryptocurrency activities in Georgia. In an effort to attract foreign investments to its IT sector, the government has established free industrial zones. There is the opportunity to open a bank account for cryptocurrency activities in Georgia to facilitate operations related to the exchange and trading of digital currencies.

Switzerland

This is another country with progressive cryptocurrency laws. In addition to federal regulation of cryptocurrency activities in Switzerland, the jurisdiction is known for its rich and long banking history. It was previously popular among those looking to launch ICO projects in Europe, but evaluations of such projects have become more stringent. Nevertheless, the country remains one of the most open to the blockchain industry.

For instance, Zug, a canton in Switzerland, earned the nickname "Crypto Valley" when it enacted various progressive laws for the cryptocurrency industry aimed at businesses and investors. The result was a significant influx of cryptocurrency companies to the region. Furthermore, if you are interested in opening an account for a crypto company in Switzerland, it is useful to know that several Swiss banks allow direct deposits and transfers of various digital assets. When opening an account for cryptocurrency operations in Swiss banks, the company's compliance with legislative requirements for economic presence in the country will be checked. This involves designating a director who is a resident of Switzerland, enrolling a functional address within the nation, and maintaining a team of employees who are local residents.

Malta

The Maltese government published rules favoring the registration of companies based on token-based technology a short while ago. Malta is considered one of the most cryptocurrency-friendly locations in the world. If you are looking to invest in BTC, explore the opportunities in Malta. Traders are required to pay a 35% income tax (6/7 of the paid tax can be refunded through tax deductions). On the other hand, all cryptocurrency transactions not related to trading are exempt from taxes. If you plan to open a crypto company or launch an ICO in Malta, you can apply for Maltese citizenship through investment.

Portugal

When planning to open a company for cryptocurrency activities in Portugal, it's essential to note that individual cryptocurrency transactions are exempt from VAT, and there are no capital gains taxes or income taxes on them. However, these tax benefits do not extend to cryptocurrency exchanges, cryptocurrency startups or blockchains, crypto hedge funds, and other enterprises related to such activities. These companies will be accountable to the regular 21% income tax rate on their profits. If you decide to launch a cryptocurrency startup in Portugal, you may initially be obliged to invest in real estate, valued at 500,000 EUR, for example.

Registration of a company in the cryptocurrency industry in Asia

Intending to enter the cryptocurrency market in Asia, considering the possibility of launching a blockchain-based project in Singapore is worthwhile. Singapore, with a high rating for political stability, is among the few jurisdictions that support a zero capital gains tax policy regarding cryptocurrency income. Some entities, after registering a cryptocurrency company in Singapore, are allowed to operate without a license during a 6-month grace period, as provided by the updated Payment Services Act.

The country's regulatory body has also initiated some cryptocurrency-friendly measures, such as publishing guiding principles for ICOs in Singapore in 2017. Singapore, among other things, is among the top five states well-known for its financial operations and is a major financial center in Asia. However, when you opt to open an account for cryptocurrency activities in Singapore, it should be noted that such requests undergo thorough scrutiny.

There is no capital gains tax imposed on extended Bitcoin investments in Singapore. Specifically, Singapore presently lacks a capital gains tax structure. Consequently, gains obtained from prolonged cryptocurrency investments are presently exempt from taxation. Nevertheless, if cryptocurrency transactions in Singapore are deemed as assets generating income, taxes may be applicable contingent on the type of profits.

Another option for registering a crypto project in Asia is to open a cryptocurrency company in Turkey, as the government is developing and implementing regulations for the crypto industry in the country. The use of cryptocurrencies falls under the control of the Central Bank in Turkey.

For those looking to register a cryptocurrency company in Japan or secure a license for a cryptocurrency exchange in the country, it's crucial to recognize that this is a relatively costly choice. As an alternative, initiating a cryptocurrency startup in the United Kingdom may be contemplated. Presently, there is no dedicated cryptocurrency legislation in the UK; however, in the guidance issued by the Treasury in January 2021, the government indicated its plans to explore incorporating specific cryptocurrencies under financial promotions regulation.

What do you need to know before registering a crypto company in Australia?

One of the few countries that have recognized cryptocurrency is Australia. Over the past couple of years, Australia has seen tremendous growth in crypto and blockchain projects. The government has acknowledged the enormous potential of the technology and has taken measures to support it.

Operating in the digital sector in Australia necessitates getting an Australian Financial Services License. Remarkably, there has been a notable increase in the available banking options tailored for virtual tokens enterprises. Consequently, the prospect of establishing a bank account for a crypto company in Australia is viable, albeit subject to rigorous scrutiny. Furthermore, the judicious selection of an Australian bank for initiating cryptocurrency-related accounts is of paramount importance. Financial institutions amenable to cryptocurrencies offer avenues for executing virtual currency transfers with minimal fees.

Australia sounds like a promising path to becoming a hub for token-based money and blockchains, so it should be considered as a prospective option.

Launch of a cryptocurrency startup in the USA

In the United States, cryptocurrency trading is regulated at both the federal and state levels. Cryptocurrency friendliness largely depends on the specific location within the country. Currently, the regulatory landscape for the crypto industry in the United States is somewhat uneven, with no universal federal regulations in place. In the absence of federal measures, several states have taken steps to enact their own laws. California stands out among them for its progressive development in the crypto space.

Regarding Bitcoin trading volume, the United States leads the list with the highest number of traders. However, before launching an ICO project in the U.S. or opening a cryptocurrency exchange based in the United States, it's important to note that all cryptocurrency transactions are subject to either income tax or capital gains tax. In America, there are numerous trading platforms and Bitcoin ATMs, particularly in cities such as San Francisco, New York, and Florida.

Registration of a crypto company in Canada

Canada regulates cryptocurrency platforms under the Securities Act, with additional laws governing Anti-Money Laundering (AML) and financial services for exchanges dealing with Canadian clients. Recognizing Bitcoin's legitimacy, Canada has established legal provisions to regulate cryptocurrencies. Cities such as Toronto and Vancouver are emerging as vibrant crypto centers, offering promise for Bitcoin users. If you're looking to establish a blockchain company in Canada, be aware that cryptocurrency may incur capital gains tax or income tax in specific situations.

Conclusion

If you want to establish a blockchain company abroad, it's crucial to choose a jurisdiction for launching your crypto startup that provides opportunities for success in this industry. To make an informed decision, it's advisable to consult with specialized experts.

Answers to your specific questions about registering a company trading digital currency can be obtained during a consultation on cryptocurrency regulation in different countries with the specialists at TK Deal. Please contact us through any convenient means.